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UK house sales slip 3% in December as rising mortgage rates bite

House sales New builds in the Aytoun Street area of Manchester city centre
House sales fell by 3% month-on-month in December, says HMRC. Photo: PA/Alamy

Just over 100,000 houses were sold last month in the UK, a 3% drop as rising mortgage rates are keeping buyers away.

An estimated 101,920 homes were sold in December 2022, which was 1% higher than in December 2021 but 3% lower than in November 2022, according to HM Revenue and Customs (HMRC) figures.

The report said house sales had generally been stable in recent months but were slightly weaker in December.

“The impact of the recent increases in mortgage rates may now be being observed within these statistics,” HMRC said.

In the financial year to date (April to December 2022), around 938,350 house sales have taken place.

During the same period year earlier, 1,049,450 house sales had taken place.

Read more: Mortgage costs expected to rise this year, says Bank of England

Zaid Patel, director at London-based estate agents Highcastle Estates, said: “Though this data shows what many expected, namely that transactions in December were lower than November, January has been an interesting month so far.

“The first week was fairly quiet then all of a sudden plenty of offers came in and those offers were being accepted. They were all accepted around 5%-10% below the asking price. Sellers seem to have accepted that they no longer hold all the cards and this could help stimulate the property market.”

The report said house sales had generally been stable in recent months but were slightly weaker in December.

It added: “The impact of higher mortgages rates is only beginning to appear now because transactions data is based upon date of completion, and it typically takes between two to four months for a house sale to complete.

“The levels of current monthly property transactions are higher than late 2019, before the COVID-19 pandemic.”

Read more: House prices fall for third consecutive month as mortgage costs keep buyers away

Justin Moy, founder at Chelmsford-based mortgage broker EHF Mortgages, said: “While transaction levels dropped during the closing stages of last year due to the ripple-effect from the mini-budget, there are still buyers out there. The alternative of private renting costs just as much as a mortgage payment, so if the deposit can be sourced, then there will continue to be a decent level of transactions this year. Not a record year by any means, but it will still be busy enough.

“There is a greater acceptance among the public that property prices in 2023 will stagnate or reduce, and that mortgage rates will hover around where they are in the short to medium term.”

Watch: Buyers struggling to afford homes after mini-budget despite house prices falling